👍 5 Reasons Why Appreciation and Recognition Help Companies to Grow Their Revenue
If you are an HR manager, product manager, team lead, innovation manager, or CEO in an IT or marketing company, then this article will help you understand how to make your company grow as fast as possible and while increasing team productivity. If you are working in a different position but are interested in HR tools, or you simply want to broaden your horizons in team management, then this article is also perfect for you.
At Billy, we studied team management for 2 years before we started making a product. We conducted countless interviews and polls, studied academy research, and even experimented with our own teams, where we were managers and founders.
Below, you can find the 5 main reasons why recognizing your employees’ work will improve your business performance.
📟 Appreciation is important for any team, but especially for remote ones
2020 was unique in many ways, and many of us will remember it for a long time. This year was also significant for the entire HR industry because many companies switched to remote work, including large corporations. Thanks to the transition to remote work, we saw how employees’ behavior changed. We also learned what is important to them, and what can be done to increase their productivity.
One way of communicating and giving feedback to teams using tools like Slack is emoji reactions, which are added to messages, as shown below.
In March 2020, we saw a massive shift of people moving to remote work, and at the same time, teams using Billy saw an increase in the number of emoji reactions to messages. We decided to investigate exactly how the behavior and use of emoji changed. We collected reaction usage statistics and classified emojis into 3 categories: positive, negative, and neutral. The analysis also included TOP 100 custom emoji, which are used most often among all teams. Some examples of reactions and their frequency can be seen below (positive ones are marked in green and negative ones in orange):
Having overlaid data for all emoji in all commands, we saw the following picture:
The switch to remote work in March more than doubled the number of positive reactions, while the number of negative ones increased by only 40%.
Positive reactions and appraisal of work are crucial for people working remotely.
👶 Millennial and Gen Z need recognition and culture
Many team managers, especially the older ones, somewhat “complained” about the younger employees in the interviews we conducted. Many of them said they don’t understand their young employees. The main difference seems to be that the generation that has grown up in the Internet age expects regular and quick feedback. According to many research studies, 72% of Millennials and Generation Z value recognition the most at work. Most employees under the age of 25 value the opportunity to grow and feel needed in the company. According to our surveys, 69% of employees under 30 quit their jobs at least once in their lives because they felt like “cogs in the machine”, and the company did not recognise how valuable they were as an employee.
It is important for many young employees not only to receive feedback but also to give it. That is why peer-to-peer recognition is the most effective way to give the young generation what they want in a workplace. Surveys among HR and managers also highlight the importance of peer-to-peer recognition. Below, you can find data on how HR managers from different companies assess the impact of peer-to-peer recognition on corporate culture, employee engagement, company values, etc.
All metrics that improve with peer-to-peer recognition also affect productivity.
Based on the data provided by some of our clients, since they started using Billy, there has been an increase in the number of tasks closed before the deadline in Jira and Github by 24% and 19% respectively.
Of course, it is more correct to measure performance in monetary terms. We are currently working on such a study, and in the future, we will be happy to show these figures with the consent of our clients.
🔑 Personalization is the key
One of the main discoveries from our research in the last 2 years is that the highest eNPS (employee net promoter score) are found among teams that try to personalize every employee’s experience as much as possible.
We surveyed 100 companies, and 8 out of the top 10 companies with the highest eNPS personalize bonuses (or at least try to), and have a transparent benefit system. As you know, correlation is not causation, and this correlation does not mean that personalization is the reason behind this finding. However, in our opinion, these actions show employees that their opinion is taken into account and that they are appreciated, and employees respond with maximum loyalty and efficiency.
8 out of the top 10 companies with the highest eNPS personalize bonuses(or at least try to), and have a transparent benefit system.
According to our surveys, personalization can be done in different ways, but a single open marketplace for bonuses is the most understandable solution. That is why it should be implemented in the first place, adding additional features and restrictions after the initial adoption by the team.
💬 Feedback is an ongoing process
One of the most frequent questions that HR managers ask us, and one which we have asked ourselves is: “How can an employee be motivated?” Of course, many HR managers think about benefits or promotions. Still, many managers forget about a vital component — constantly collecting feedback from their employees. It has been found that the happiest workers are those who have been listened to and heard, and where changes are made accordingly.
The opposite statement is also true; there is no one more unhappy than an employee who cannot come to his manager with his problems.
Many companies set up processes for collecting feedback at a specific frequency (the most common frequency we saw was every six months), using methods like 360°, but most managers forget that this process should be constant, and more frequent than once every 6 months.
My personal answer to the question “how can an employee be motivated?” is very simple — ask them for their opinion about the company and their colleagues. Show them that their opinion is important, and you will have the most loyal employees possible.
We believe that collecting feedback should be automated as much as possible, so we offered some teams option to use interaction analysis from Billy. Based on who interacts with whom and how often, Billy asks you to leave feedback on your top 5 most frequent contacts at regular intervals
At first, this may cause some discomfort, but after a month and a half, our research showed that every engineering manager, HR manager, and team lead begins to value this source of information. And the key is regularity — even the most introverted introverts start sharing their problems and feedback after a couple of weeks. This process allows companies to find more and more ways to improve processes and increase productivity, leading to increased revenue.
The use of feedback collection tools at Billy does not obviate the need for 1-on-1 meetings, which should also be regular. According to our surveys, 64% of managers believe that they should have 1-on-1 meetings weekly or biweekly.
Many teams try to make an internal tool for recognition and appreciation (we saw lots of examples of this in 2020). Some teams make simple Slack bots that allow you to express your gratitude in words and write these words of thanks in a table (Excel or Airtable). However, such tools quickly die out — usually, there is only enough enthusiasm for a month or two. Motivation and recognition tools only work when they have gamification elements. For example, at Billy, we made restrictions (e.g. unused tokens expire, you cannot transfer more than 100 coins to one colleague per month, etc.). Such restrictions, along with the ability to exchange the received thanks for something in the store, turn thanks into a game with positive reinforcement, leading to maintained interest over time.
We call this the culture economy, and it allows us to increase team engagement while simultaneously increasing each team member’s productivity.
One of the secrets to increasing productivity is recognizing the fact that colleagues’ gratitude is an external trigger that motivates many employees to work even more efficiently and intensely, without leading to burnout.
The culture economy is one the best remote work and communication tools, which worked perfectly in 2020.
According to our data, 86% of users who started using “Thanks” currency continued to do so after 6 months.
This post was originally published in Billy App Blog
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